NEDA DIRECTOR NERI SEES 4.1% GDP GROWTH IN 1ST QUARTER
MANILA, March 3, 2004 (STAR) By Des Ferriols - The domestic economy is expected to grow by 4.1 percent in the first quarter of the year, touching the low end of the government’s official projection and lower than the first quarter growth recorded in 2003.
The National Economic and Development Authority (NEDA) said yesterday that the economic expansion in the first quarter would be driven by consumption spending which has been the powerhouse behind the country’s economic growth since 2001.
NEDA Director General Romulo Neri said the leading indicators for the first quarter economic performance show sustained growth although slower than the 4.5-percent growth recorded over the same period last year.
The source of the growth, however, continues to worry economists who have expressed concern that consumer spending is not sustainable unless translated into manufacturing and industry growth.
According to Neri, the numbers emerging from the National Statistical Coordination Board (NSCB) are even more optimistic, ranging from "a fantastic 4.2 percent to 7.9 percent."
"I asked them to verify these numbers because they’re too high and unbelievable," he said. "We think the growth rate would be closer to 4.1 percent on the minimum."
The problem is that personal consumption has been driving economic growth, with merchandize exports trailing due to the weakness in the country’s primary export earner, the electronics and semiconductor sector.
NEDA reported in the 2003 national income accounts that the services sector has been providing the impetus for growth, driven mostly by higher consumption of telecommunications services fueled by the phenomenal popularity of mobile telephony.
This year, the government projected that the gross domestic product would grow by an average of 4.5 percent.
Reported by: Sol Jose Vanzi
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